Elks weigh options for Saddleback Inn site

Nov. 13, 2013

Updated Nov. 14, 2013 12:38 p.m.

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The Saddleback Inn site, on the block of 1600 East First Street in Santa Ana, sits vacant after the old hotel was demolished in July. In the background is the Santa Ana Elks Lodge. The Elks own the site. RON GONZALES, ORANGE COUNTY REGISTER

Flames shoot through the roof of the Saddleback Inn on First Street in Santa Ana in a March 29 fire. FILE PHOTO: ORANGE COUNTY REGISTER

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On March 31, demolition crews tear down a pedestrian bridge to the fire-damaged Saddleback Inn over First Street in Santa Ana. Two days before, the long vacant property was hit by its third fire in two years. FILE PHOTO: JEBB HARRIS, ORANGE COUNTY REGISTER

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A construction worker swings a pickax as he removes pieces of wood from the roof of the long-vacant Saddleback Inn, which was heavily damaged in a fire March 29. Demolition took place last summer. FILE PHOTO: KEVIN LARA, ORANGE COUNTY REGISTER

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The Saddleback Inn site, on the block of 1600 East First Street in Santa Ana, sits vacant after the old hotel was demolished in July 2013. RON GONZALES, ORANGE COUNTY REGISTER

The Saddleback Inn site, on the block of 1600 East First Street in Santa Ana, sits vacant after the old hotel was demolished in July. In the background is the Santa Ana Elks Lodge. The Elks own the site.RON GONZALES, ORANGE COUNTY REGISTER

SANTA ANA – The Santa Ana Elks Lodge is weighing its options for the site of the old Saddleback Inn, which has returned to the organization’s control.

George Flores, chairman of the Elks board, said the ground lease with Saddleback Inn LLC, which owned the buildings that had occupied the site, has been terminated.

“They have surrendered the property back to us,” Flores said. Transfer of the property took place last month, he said.

The Elks own the 2.4-acre site on which the Saddleback Inn sat, on the 1600 block of East First Street, adjacent to the Elks Lodge.

Flores said that among the options the lodge is exploring are remaining at the site and divesting themselves of the property and relocating.

“Everything is still in a great state of flux,” he said.

The site, considered a gateway to the city given its proximity to I-5, has generated some inquiries from developers.

Flores said next steps depend on what happens in court.

The site has been a vacant lot since July, when the remaining buildings were torn down after a fire in March.

A year ago, the city of Santa Ana sued to place the long-abandoned Saddleback Inn property under a receiver. Saddleback Inn LLC, which owned the hotel, held a leasehold interest in the property on which the old inn sat. The lawsuit listed such problems as rotting wood, rusting metal and vagrants. A judge in January approved the appointment of a receiver.

On March 29, fire struck the Saddleback Inn, ravaging the main building and resulting in the destruction of its second story and leading to the demolition of a pedestrian bridge across First Street.

Days later, an Orange County judge ruled that the receiver could borrow against the property to tear it down.

That resulted in an encumbrance on the property – a $955,000 receivership certificate.

“The payoff of that lien is the obligation of the property owners, but I recommend that the Elks Building Association continue the process of finding a refinancing for that amount,” said Mark S. Adams of California Receivership Group in court documents filed recently. Adams is seeking discharge from the receivership, with a hearing set for Dec. 17.

The report Adams filed listed about $916,000 in expenses, mostly for demolition.

The Elks Building Association of Santa Ana, which owns the land on which the burned-out Saddleback Inn sat, in April sued Saddleback Inn LLC and J.K. Properties Inc., of which it is a subsidiary, alleging that they had breached breaching terms of the lease by allowing the hotel to fall into disrepair.

J.K. Properties and Saddleback Inn LLC denied the allegations. Saddleback Inn LLC filed a cross-complaint Nov. 1. It contends that the inn was already in need of repair when Saddleback Inn LLC took over the ground lease in 2002. Saddleback paid the Elks about $160,000 a year in ground rent and intended to renovate the property, but was unable to obtain an extension of its ground lease past the 2019 expiration, the action said. A trial is set for June 16 in Orange County Superior Court.

The hotel opened in 1964, becoming a popular Orange County gathering place. By the 1980s, it began a downward slide as a result of competition from newer hotels.

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